This Earth Day we’d like to celebrate the remarkable work of Divest Victoria and their campaign – with help from our Environmental Dispute Resolution Fund (EDRF) – to allow communities across BC to divest from fossil fuels. As a result of their work, this September BC’s local governments will be considering a resolution calling for fossil fuel-free investment options for their own investment portfolios. If the resolution goes forward, this good news story has the potential to send a powerful message to the fossil fuel industry.
What is divestment?
Divestment is the opposite of an investment – it simply means getting rid of stocks, bonds, or investment funds that are unethical or morally ambiguous.
The Fossil Fuel Divestment Movement is one of the fastest-growing parts of the global climate movement. Since 2011, with students on a half dozen campuses asking their colleges to sell their investments in fossil fuel companies, it has grown to 515 institutions representing US$3.4 trillion in investments, including cities from around the world.
Each institution that pulls its support from the fossil fuel industry sends a strong message about the moral problems posed by our fossil fuel economy, broadly, and for the institutions and companies that benefit financially from it. Fossil fuel investments generate profits primarily because the industry isn’t paying when its products degrade our atmosphere, and, as a result, destroy countries and kill people. To change this, fossil fuel companies must begin to take “cradle to grave” responsibility for their products, including responsibility for the harm caused by fossil fuels.
Divest Victoria and the Municipal Finance Authority
When Divest Victoria started asking the City of Victoria to sell their investments in fossil fuels, they quickly learned about a little-known (outside government) organization called the Municipal Finance Authority (MFA). Under BC laws related to local government, municipal investments and loans are often handled by the MFA. As its website explains:
The Municipal Finance Authority of British Columbia (MFA) was created in 1970 to contribute to the financial well-being of local governments throughout BC. The MFA pools the borrowing and investment needs of BC communities through a collective structure and is able to provide a range of low cost and flexible financial services to our clients equally, regardless of the size of the community. The MFA is independent from the Province of British Columbia and operates under the governance of a Board of Members appointed from the various Regional Districts within the province.
The reality was that the City of Victoria didn’t have direct control of all its investments because it invested through the MFA, and it turned out that the MFA doesn’t currently offer options for non-fossil fuel investments. As a result of Divest Victoria’s efforts, the City drafted a resolution calling on the MFA to offer a “divestment option.” This resolution was recently passed with broad support at the 2016 meeting of the Association of Vancouver Island Coastal Communities and in September will be considered by communities from around the province at the Union of BC Municipalities (UBCM) meetings in Victoria:
Empowering Local Governments to Pursue Socially Responsible Investing
Whereas many local governments have committed to climate action and socially responsible investing;
And whereas a central strategy for climate change mitigation is to reduce emissions into the atmosphere relating to the consumption of fossil fuels, which includes divesting from fossil fuels and reinvesting in renewable sources of energy, employment and revenue;
And whereas local governments are empowered in provincial legislation to invest through the Municipal Finance Authority, and the current investment portfolio offered by the Municipal Finance Authority does not include a fossil fuel-free investment option:
Therefore be it resolved that AVICC call on the Municipal Finance Authority to create a fossil fuel-free investment fund to provide local governments with an investment choice that aligns with priorities for climate action and social responsibility.
If you agree that local governments should have the option of investing in a fossil fuel-free portfolio, take a moment to contact your mayor and council and ask them to support the motion when it’s considered at the UBCM in September.
How the EDRF helped
People sometimes assume that a legal fund, like our Environmental Dispute Resolution Fund, is for people who want to go to court. Certainly, we do fund court cases. But we’ve found that we’re often most effective supporting community groups who want the help of a lawyer in identifying their legal strengths and engaging with their decision-makers – as was the case here with Divest Victoria.
In this case, a legal opinion by Farris and Company lawyers, Sean Hern and Catherine George, was very useful in understanding the relationship between Victoria and the MFA. It allowed the group to press for changes at the MFA level, rather than to continue pressing Victoria for a decision that it couldn’t make.
But more than that – it helped Divest Victoria identify their options and plot a strategy. Laurel Collins of Divest Victoria told me:
After we got the City to pass an initial motion asking staff to look into how our municipality could divest, we discovered the city faced a number of barriers to proceeding. And, it wasn’t clear what steps we as an organization would take next. We had different interests and ideas and a lot of meetings. People got exhausted by the conversation.
But our lawyers Sean Hern and Catherine George showed us exactly where our leverage points were, and made it clear how we could move forward on divestment. Now, people are engaged again, excited about upcoming meetings, and our organizing has been revitalized.
West Coast Environmental Law’s EDRF helps groups like Divest Victoria – groups that can work with their lawyer to develop a pathway towards their environmental goals. In some cases those paths might include litigation or negotiations, but for Divest Victoria they included municipal resolutions.
Happy Earth Day to Divest Victoria, and to everyone who is working in their communities to defend our environment. Following the trail set out by Divest Victoria, you may wish to start a divestment campaign in your own community.
By Andrew Gage, Staff Counsel